Farmland values continued to increase at a rapid pace through the end of 2021. Alongside sustained strength in farm income and credit conditions, the Kansas City Fed says the value of all types of farmland was over 20 percent higher than the year before.
The recent strength in agricultural real estate markets has been supported by strong demand, historically-low interest rates, and vastly-improved conditions in the farm economy.
The possibility of weaker ag income and higher interest rates in the economy remain risks for farmland markets. Even with the uncertainty around input costs, lenders expect favorable conditions in the economy to support farm finances and lead to more gains in farmland values during 2022.
Despite risks, the Fed says ag appears to be well-positioned in the year ahead.
(From the National Association of Farm Broadcasters)